# Why Banks Need to Embrace AI-First Customer Service
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-06-04
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Banking Automation: Accelerating Customer Service
Meta Description: Learn how automation in banking is transforming customer service post-pandemic, improving productivity, reducing errors, and enhancing customer experience.
URL: https://financedigest.com/why-banks-need-to-embrace-ai-first-customer-servicehtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/ai-first-1736838298263-compressed.jpg)

_By **Jessica Gopalakrishnan,** Senior Director, Cognigy_

The next wave of automation in banking has been brewing for several years and COVID-19 has accelerated the focus in many areas, particularly in AI, e-identity, contactless payments, RPA and conversational solutions. [Deloitte](https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/banking-industry-outlook.html) suggests the post-pandemic bank will emerge as a much different one, with greater attention on the digitization of operations and customer service automation.

The case for AI automation technologies for customer service is a strong one: improved productivity, customer satisfaction and cost savings. However, many banking decisions and processes can still be slow and manual. Complex layers impact turnaround times for core procedures from credit checks to employment verification. Mortgage and lending processes, for example, can take up to two months. Manual processing can create such delays, lead to error rates [as high as 30%,](https://www.ibm.com/thought-leadership/institute-business-value/report/banking-automation) and increase rework volumes due to employee fatigue and poor training.

While the value of customer service automation may be understood, and most are likely working towards implementing automation in some capacity, competition is fiercely heating up and [customers are hot on the hunt for better options and better experiences](https://www.financedigest.com/visionary-banks-fight-the-blur-hybrid-computing-architecture-brings-a-faster-sharper-customer-experience.html "Visionary banks fight “the blur”: Hybrid computing architecture brings a faster, sharper customer experience"). In many ways, an automation-first approach—one where automation handles all contact initially—may be the only way to drive customer service forward.

**Looking at customer service differently**

[Banking contact centers and customer](https://www.financedigest.com/knowing-your-customers-needs-is-essential-for-banking-innovation.html "KNOWING YOUR CUSTOMERS’ NEEDS IS ESSENTIAL FOR BANKING INNOVATION") service teams face unprecedented, heightened consumer expectations. Not only do consumers [today want the best rates from their banks](https://www.financedigest.com/stress-testing-why-did-my-bank-go-bust-today.html "STRESS-TESTING – WHY DID MY BANK GO BUST TODAY? "), but they demand excellent service as well—meaning quick resolutions with 24/7 availability across all possible communication channels. Human labor and human management related challenges can be aided through automation, which is why [businesses are looking at different ways to bring](https://www.financedigest.com/4-ways-moving-office-can-bring-your-business-roi.html "4 ways moving office can bring your business ROI") automation to the contact center and customer service processes.

This [means automating the back](https://www.financedigest.com/banking-turmoil-means-recession-fears-are-creeping-back.html "Banking turmoil means recession fears are creeping back") and forth for both electronic and document-centric processes and then providing a customer facing interface to these processes. If a customer wants to apply for a loan, for example, they should be able to start the process online and then get status updates and information requests through their channel of choice. Traditionally, this is either done by calling in repeatedly or sending emails back and forth with whomever is helping with a loan, resulting in unnecessary manual effort that creates delays in responding to customers.

By automating the experience, the process can be accomplished through self-service. With conversational AI, [customers are able to communicate through text or voice channels and interact](https://www.financedigest.com/ai-will-power-95-of-customer-interactions-by-2025.html "AI will power 95% of customer interactions by 2025") with chatbots or voice bots using natural language. Instead of pressing a number to get to an operator, [customers can simply ask for what they want and get assistance with what they need](https://www.financedigest.com/the-bank-of-me-why-banks-need-to-be-totally-customer-centric.html "The bank of me – why banks need to be totally customer centric") immediately without waiting on hold.

Dialogues with customers on any channel in an assisted, automated way also create a joint benefit of freeing up time for human agents, reducing the time they spend on basic status updates or requests for information.

**Competing for customers beyond** [digital transformation](https://www.financedigest.com/how-digital-is-transforming-finance-in-2023.html "How Digital Is Transforming Finance in 2023")

Newer banks entering the marketplace are providing innovative, self-service options as well as a myriad of other attractive features to compete with and disrupt traditional and large banks.

Many banks have built up complex [systems of legacy](https://www.financedigest.com/retailers-weighed-down-by-their-own-legacy-systems-survey-reveals.html "Retailers Weighed Down by their own Legacy Systems, survey reveals") tools, which have been deeply rooted into operational structures that aren’t flexible enough to interact with modern systems. With new Fintech and [bank challengers](https://www.financedigest.com/5-things-to-consider-when-choosing-a-challenger-bank.html "5 Things to Consider When Choosing a Challenger Bank") crowding the market—cloud-based and mobile-first, digitally enabled—the tug-of-war for market share has intensified.

Challenger [banks have the luxury of offering](https://www.financedigest.com/first-abu-dhabi-bank-reiterates-not-eyeing-offer-for-standard-chartered.html "First Abu Dhabi Bank reiterates not eyeing offer for Standard Chartered") high-interest savings accounts and low-interest loan packages with little unease about funding issues long-term. They can also onboard loans that might be considered too risky for a community bank or [credit union](https://www.financedigest.com/credit-union-loans-in-high-demand.html "Credit Union Loans in High Demand") and reap the financial benefits of those loan packages.

Combined with consumer expectations, traditional banks are pressured even further. Take mortgage loan processing for example. As one of the [biggest drivers for revenue at a bank](https://www.financedigest.com/the-recent-bank-of-england-meeting-the-biggest-rate-hike-recession-warning-and-the-fallout.html "The recent Bank of England meeting, the biggest rate hike, recession warning and the fallout"), if a bank takes too long to process steps, isn’t available on the weekends or evenings, has long phone wait times, has high fees and high interest rates, this overall poor package will prompt consumers to shop around.

**Conversational AI + RPA**

On the customer service automation side of digital transformation, two [technologies aiding banks](https://www.financedigest.com/6-technology-trends-banking-2019.html "6 Technology Trends for Banking in 2019") and financial institutions are conversational AI and robotic process automation (RPA). In just the last few years, [banks have found significant value in this convergence](https://www.financedigest.com/banking-and-fintech-convergence-will-increase-reliance-on-it.html "Banking and Fintech Convergence will Increase Reliance on IT"). Both employ [artificial intelligence](https://www.financedigest.com/artificial-intelligence-in-banking-robo-advisors-and-beyond.html "Artificial Intelligence in Banking – Robo Advisors and beyond") to do their job, are available 24/7/365 and add a virtual workforce to an organization that work alongside the human process owners.

Historically, automation technologies have been back-office technologies used to help with things like month-end closings. Today, automation technology is being brought into the contact center, IT, HR and other departments to automate human-to-human interactions and provide faster customer service.

RPA is used to speed up the execution of previously manual business processes. In banking, automation [technologies extract or approve all the relevant loan data](https://www.financedigest.com/manchester-arts-centre-the-lowry-selects-logpoints-siem-technology-to-safeguard-customer-data.html "Manchester arts centre The Lowry selects LogPoint’s SIEM technology to safeguard customer data") in seconds, validating customers from multiple sources. And for mortgage applications, data from multiple [sources could be simultaneously and automatically validated to reduce delays](https://www.financedigest.com/airbus-may-delay-some-2023-jet-deliveries-sources.html "Airbus may delay some 2023 jet deliveries: sources").

Conversational AI connects people to the systems and data they [need to access](https://www.financedigest.com/55-of-uk-smes-unable-to-access-all-funding-needed-to-grow.html "55% of UK SMEs unable to access all funding needed to grow") through a natural language interface. By speaking in their own terms, customers can ask questions without having to navigate hierarchical menus in IVR systems.

When combined, the two technologies make a compelling proposition to slim down operational costs, and drive increased profitability and customer satisfaction.

By offering self-service, Axis Bank, for example, has been able to reduce the turn-around time on savings account opening by about [90% using RPA](https://www.livemint.com/Technology/WCjwMFggazeG7fcQFsSTEN/How-Axis-Bank-is-shaping-its-digital-journey.html). Citigroup, Capital One and JPMorgan Chase are currently using [AI-based automation](https://www.businessinsider.com/ai-in-banking-report?IR=T) to improve efficiency like validating customer data and tracking audit trails for compliance. In 18 months, one of the largest American banks, [Bank of America](https://www.fintechfutures.com/2019/11/case-study-on-bank-of-america-how-robots-help-serve-and-protect-the-bank/), was able to successfully deploy 22 robots across its front, middle, and back offices, saving the financial institution an early $100,000 per code request in operational costs.

**Making an impact with automation**

In the last few years there is much commonality in the use cases that are being deployed at banks and financial institutions. Banks, like most companies, are looking to automate their contact centers to improve the experience for the customer, be it with voice, web chat, SMS or a mobile application.

A recent [Accenture study](https://newsroom.accenture.com/news/despite-digital-acceleration-banks-still-lack-ability-to-achieve-peak-productivity-from-technology-investments-accenture-report-finds.htm) found that, despite digital acceleration, banks still lack the ability to achieve peak productivity from technology investments, and they must scale for future readiness. [Banking executives expect AI-based technologies will not only transform their industry](https://www.financedigest.com/the-survival-of-the-banking-industry.html "THE SURVIVAL OF THE BANKING INDUSTRY") but will also add net gains in jobs.

As competition in banking continues to fire up, the pressure for better customer service and customer experiences only grows. [Automation technologies from process automation to conversation automation can be applied in the back-office and front-office operations to enable and accelerate the future](https://www.financedigest.com/enterprise-automation-is-the-future-of-finance.html "Enterprise automation is the future of finance") of customer service.

_**About the Author**_

Jessica Gopalakrishnan is a marketing strategist experienced in accelerating growth at [early stage and mature startups](https://www.financedigest.com/valuing-your-early-stage-startup.html "Valuing your Early Stage Startup"). As the Senior Director of Marketing at Cognigy for the Americans, she is passionate about advancing global awareness about conversational AI, customer service automation and AI-first concepts.

_**About Cognigy**_

Cognigy is a global leader in omnichannel Customer Service Automation. Intelligent voice and chatbots [powered by its Conversational AI platform help businesses improve service](https://www.financedigest.com/emergency-call-services-telcos-urge-eu-to-protect-telecoms-networks-from-power-cuts.html "Emergency call services, telcos urge EU to protect telecoms networks from power cuts") quality, reduce operational costs, and support teams across the enterprise. Cognigy’s award-winning AI understands user intents precisely and enables natural dialogs in over 100 languages. Easily scalable and pluggable, its low-code platform automates business processes through integrations into backend systems, operates as SaaS and on-premise, and is GDPR compliant. Cognigy’s worldwide client portfolio includes BioNTech, Bosch, Daimler and Lufthansa. Learn more at [https://cognigy.com](https://cognigy.com).

**This is a Sponsored Feature**


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---